The ostensible defense of making the creditors take a deeper haircut than the workers in the auto bankruptcies was that the workers were needed for continuing operations, and besides, it would be bad for the economy if they lost their pensions, etc.
I'm curious to see whether the people advancing that argument can justify this:
The Pension Benefit Guaranty Corporation, which insures pension plans, caps the amount of benefits it will pay, using a formula based on age and the type of benefits an employee earned. But in a side arrangement, G.M. is agreeing to pay special supplements, called top-ups, so that Delphi's union retirees get everything they were promised.The automaker is drawing the money from its own pension fund, according to a person familiar with the arrangement. In a sense, the G.M. pension fund is being weakened to help the Delphi union members.
Mr. Gump and others suspect the Treasury Department told G.M. to pay the supplements. The federal government is both the company's largest shareholder and the financier of its restructuring, through the Troubled Asset Relief Program. Obama administration officials confirmed that they brought the parties together to negotiate a resolution of Delphi's pension failure but said they did not dictate the outcome.
The difference between the haves and have-nots at Delphi is not between the highly paid and lower-wage earners. As a senior engineer, Mr. Gump simply did not belong to a union. Neither did Delphi's thousands of other engineers, bookkeepers, clerks, quality controllers, purchasing agents and other white-collar employees. They may have earned more in some cases, but they did not have the chance to earn paid overtime as union members did in good years. Records show the average pay for a nonunion worker just shy of 50 years old, with 20 to 24 years' service, was about $96,000.
The average base wage for a UAW worker is supposed to be about $60,000. So the white collar workers average quite a bit more--but the UAW distribution is fairly flat, while the white collar distribution is not, so a fair number of those white collar workers will be making roughly the same as a union member. Yet the UAW has had their gold-plated pensions made whole, while the white collar workers . . . well, the Times reports that one woman saw her pension fall from $3,000 a month to just under $400.
What possible logic is there for this, other than the fact that the UAW generously supports the Democratic party? If you prick a white collar worker, does he not bleed? And if their home gets foreclosed on, does it not further destroy Michigan's economy?
* I say "supposed" because I can't get a good figure including overtime, which for union workers can double their wages in good years. (Of course, they're not having good years now--but the retirees lived through quite a lot of them.)